Extract
Lac minerals ltd. v. International corona resources ltd., [1989] 2 S.C.R. 574 (1989)
Lac Minerals Ltd.
v. InternationalCorona Resources Ltd., [1989] 2 S.C.R. 574Lac Minerals Ltd. Appellant v.International Corona Resources Ltd. Respondent indexed as: lac minerals ltd. v. international corona resources ltd.File No.: 20571.1988: October 11, 12; 1989: August 11.Present: McIntyre, Lamer, Wilson, La Forest and Sopinka JJ.on appeal from the court of appeal for ontarioCommercial law -- Confidentiality -- Mining companies discussing possible joint venture -- Confidential exploration results disclosed during discussions -- High potential property adjacent to lands of exploration company -- Mining company in receipt of information purchasing property for own use -- Whether or not company in breach of duty respecting confidences -- Whether or not breach of fiduciary duty -- If so, the appropriate remedy.Industrial and intellectual property -- Trade secrets -- Confidentiality -- Mining companies discussing possible joint venture -- Confidential exploration results disclosed during discussions -- High potential property adjacent to lands of exploration company -- Mining company in receipt of information purchasing property for own use -- Whether or not company in breach of duty respecting confidences -- If so, the appropriate remedy.Trusts and trustees -- Fiduciary duty -- Trade secrets -- Confidentiality -- Mining companies discussing possible joint venture -- Confidential exploration results disclosed during discussions -- High potential property adjacent to lands of exploration company -- Mining company in receipt of information purchasing property for own use -- Whether or not breach of fiduciary duty -- If so, the appropriate remedy.Remedies -- Unjust enrichment -- Restitution -- Constructive trust -- Nature of constructive trust -- When constructive trust available.International Corona Resources Ltd., a junior mining company, carried out an extensive exploration program and made arrangements to attempt to acquire the Williams property. Representatives from a senior mining company, Lac Minerals, read of the test results in a public newsletter and arranged to visit the Corona property. Corona showed the Lac representatives confidential geological findings and disclosed the geological theory of the site and the importance of the Williams property. Detailed private information was left with Lac officials during further discussions about development and financing options. Corona was advised by Lac to aggressively pursue the Williams property. The matter of confidentiality was not raised.The Lac representatives, after their visit to Corona's site, instructed their personnel to gather information on the area in question and to stake favorable claims east of the Corona property. Lac acquired the Williams property but never informed Corona at any time of its intention of acquiring that property. Later negotiations between Lac and Corona for the Williams property to be turned over to Corona failed.Corona, after its relationship with Lac had ended, concluded various agreements with Teck Corporation. These agreements provided for a joint venture in developing a mine on the Corona property and purported to give Teck a 50 per cent interest in the fruits of Corona's lawsuit against Lac, with Teck agreeing to pay certain costs.The trial judge concluded that Lac and Corona had not concluded a binding contract but found Lac liable under the two other possible heads of liability, breach of confidence and breach of fiduciary duty. He decided that the appropriate remedy for breach of fiduciary duty was the return of the Williams property to Corona but allowed Lac's claim for a lien for the cost of improvements, and the amounts paid to Williams excluding royalty payments. The actual amount spent by Lac on developing the property was discounted to take into account the fact that Corona, if it had not been deprived of the Williams property, would have expended less to develop the property. Both parties were given the option of undertaking a reference to determine the amount Lac had spent to develop the Williams property. Lac was ordered to transfer the property to Corona upon payment by Corona to Lac of these amounts. A reference was also ordered to determine the amount of the profits obtained by Lac from the Williams property. Lac was ordered to pay the amount of such profits to Corona with interest. Damages were assessed on the principles applicable to breach of fiduciary duty in the event that, on appeal, a court should decide that damages were the appropriate remedy.The Court of Appeal affirmed the findings of the trial judge with respect to breach of confidence and fiduciary duty. It also confirmed the remedy but added that a constructive trust was an appropriate remedy for both the breach of confidence and fiduciary duty. The court did not deal with the appellant's attack on the assessment of damages.Three main issues were raised in this appeal: (1) did a fiduciary relationship exist between Cor...See the full content of this document
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